New York Attorney General Triples Alleged Fraud Size, Expands Lawsuit Against Digital Currency Group to Over $3 Billion

New York Attorney General Letitia James expanded her lawsuit against Digital Currency Group (DCG), alleging a fraud scheme that has now tripled in size to over $3 billion, as reported by Reuters. Initially filed in October, the lawsuit targeted DCG, its Genesis Global Capital unit, and Gemini Trust, the exchange founded by Cameron and Tyler Winklevoss.

The initial claims asserted losses exceeding $1 billion, attributing them to misleading information regarding the Gemini Earn program, where customers could lend crypto assets to Genesis for a promising return. As more investors came forward, the attorney general noted that the alleged scam extended to those who directly sent money to Genesis, falsely assured that their funds were secure.

Letitia James is now seeking restitution of over $3 billion for more than 230,000 investors believed to have been defrauded in what she describes as an "illegal cryptocurrency scheme." She emphasizes the need for stronger cryptocurrency regulations to safeguard all investors.

Among the defendants are Barry Silbert, CEO of DCG, and Soichiro Moro, a former Genesis chief executive. Both Genesis and Gemini faced legal action from the U.S. Securities and Exchange Commission (SEC), accused of bypassing disclosure requirements designed to protect Gemini Earn customers. Last week, Genesis agreed to a $21 million fine with the SEC, contingent on fully repaying customers through the bankruptcy process. In a countermove, Gemini has filed a lawsuit against DCG related to the failure of their crypto lending partnership.

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Reuters